As our oldest daughter, Maeve, is working through her third year of nursing school and Phoebe and Sophie are in the thick of college tours, Jill and I are acutely aware of some significant changes coming our way. We realize that it won’t be long before we become “empty nesters.” This is a phase I’ve heard many folks talk about in their own lives over my professional career, but it always seemed so far away for us. Now that it’s on the horizon, we find ourselves thinking more about not only what’s next for us as a family but reminiscing about all the joys that parenthood has brought to our lives so far. The girls amaze us every day with their strength, their intelligence and their kindness.

And like many others who have children approaching adulthood, I would be lying if I didn’t admit that I’m a little curious about what life will look like when Jill and I are no longer responsible for our girls’ day-to-day lives. As they head off to the dorms at college and on to their own apartments or homes, our house might seem a bit empty at first. It’ll be an adjustment, for example, to cook for just the two of us. Or have to feed the dog ourselves. But the bright side? Well, we’ll probably notice some savings. After all, kids are not cheap to raise as every parent knows.

So, of course, I wanted to dig a little deeper into this and find out just how much we may have spent raising our girls over the years. This week with our time together, I’d like to share what I learned about the cost of raising kids in the United States.

Let’s start with some basic information. According to the US Department of Agriculture, in 2017 it published a report that calculated the average cost of raising a child to adulthood, not including college expenses. At that time, it found the cost of raising a child born in 2015 was $233,610. This assumes the child was born to a middle-income, married couple. When adjusted for inflation, the number jumps to $267,233 in 2021 dollars, based on data from the Bureau of Labor Statistics.

The numbers for single parents are somewhat lower; in 2015, the USDA found that single-parent households spent an average of $172,200. When adjusted for inflation, that figure increases to $196,984 as a solo parent’s current cost to raise a child to 18. The USDA found the cost of raising kids can also vary by region, with the Northeast being the priciest location in the nation.

Now luckily, parents don’t need to “save up” these hefty figures before they have children, but they certainly should consider these long-term costs and ensure they are ready—both mentally and financially—before committing to parenthood.

One way to prepare is to consider cutting costs where you can, such as making a budget and sticking to it. And of course, be sure to evaluate your life insurance coverage so that your family is prepared in case one of you dies unexpectedly and leaves a financial gap. When you are young and healthy, purchasing life insurance means you can likely get ample coverage at an affordable price. Without life insurance, if one parent passes away, it could have a lasting financial and mental toll on the entire family. Life insurance might be one of the best ways to ensure your family maintains its lifestyle if you were to pass away, whether they depend on your income or you are a stay-at-home parent raising the kids.

Another significant constant expense is your kids’ health insurance. I know this is an obvious consideration, so you want to do a little research to find qualified professionals for advice about the best health insurance for families. Car insurance will also become a consideration when your children are old enough to drive. Insuring a young driver or teen can be very costly; frankly it is very costly. Get this: adding your 16-year-old to your car insurance policy runs an average of $2,5313 per year.

Then there’s the costs of college, which are not included in the numbers here. Currently, the average cost of full-time undergraduate tuition ranges from $18,550 to $54,880. Starting early in your kids’ lives allows you to leverage time to build up nice savings for your child’s post-high school education.

And now on a lighter note, kids don’t necessarily have to be as expensive as the numbers suggest. Prepare mentally and make sure to implement sound financial planning and investment strategies, particularly a strategy that incorporates downside risk mitigation that may help you achieve the highest probability of financial success. Because if you manage the downside, well, the upside can take care of itself. And by doing so, you can be well-equipped to have a baby and raise the child to adulthood, and even contribute to college costs.

So, you younger Cutter Family Finance followers out there, take it from an old guy like me who, coupled with my wife Jill, has raised three beautiful ladies; if you’re thinking about taking that next big step to parenthood, let me assure you—it is completely worth it!

So as always—be vigilant and stay alert, because you deserve more!

Have a great week.

Jeff Cutter, CPA/PFS, is president of Cutter Financial Group, LLC, an SEC-registered investment advisor with offices in Falmouth, Duxbury and Mansfield. Insurance offered through its affiliate, CutterInsure, Inc. We do not offer tax or legal advice. He can be reached at jeff@cutterfinancialgroup.com.

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